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The global property management market size stood at USD 11.70 billion in 2018 and is projected to reach USD 23.63 billion by 2026, exhibiting a CAGR of 9.2% during the forecast period.
This market growth is mainly driven by a prerequisite for tools and platform to tackle changing real estate preferences of customers and the rising need for better consumer handling and support. Property managers and real estate agents are focusing on leveraging benefits of software to expand their customer base by following a unified technology platform. The property sector is going through an accelerated pace of transition characterized by the evolving role of hotel and lodging brands and a nascent use of platform approach for customer retention. As a part of business strategy, key players are highly investing in research and development activities, which have further elevated the adoption for this market. For instance, in 2018, Oracle Corporation announced an update for Oracle Property Manager in compliance with IFRS 16 and US GAAP for ASC 842. The updated product features compliance reports with ROU and liability balances, lease accounting transformation, and lease management with enhanced reporting.
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Advanced Technology Factor and Sustainability Turning Businesses into Asset Valuations
The property business has begun on the path to the prospects provided by technology and innovation. Data and automation are the principal fields in the real estate industry in which respondents foresee the most improvement. Real estate developers are increasingly identifying ways to harness new data-driven technologies and resource management technologies to improve convenience, environmental efficiency, and sustainability.
Subsequently, property owners, property managers, and construction contractors have partnered together to upgrade aging company processes, decision-making structures, and infrastructure in an attempt to implement technologies that can minimize maintenance expenses, strengthen customer relationships, maximize energy usage and raise total asset value. In addition, with exponential growth of data, vendors are emphasizing on integration of Artificial Intelligence (AI) solutions to efficiently simplify processes to free up human capital and provide tenants more value-added services. For example, property managers are using automation, AI and cloud-based technologies to incorporate real-time data and simulate various scenarios. By monitoring tenant information using these solutions, property managers are able to predict demand and make better investment decisions.
Similarly, Internet of Things (IoT) and 5G infrastructure technology is also likely to have a profound impact on the global property management market. IoT Connectivity and the ability of companies to capture, interpret and respond to vast amounts of data promptly have enabled them in adopting marketing strategies for targeted customers. Additionally, improved connectivity could play a major role in the growth of smart cities and autonomous vehicles. Beyond data, the property management industry will be convinced by mature technologies such as autonomous vehicles, virtual reality, 5G technology, and 3D printing.
Property Managers and Owners Embracing Smart Building Solutions to Attract Tenants
With companies looking to use emerging technologies to enhance workplace health, boost their environmental effects, and potentially decrease energy costs, property owners and property agents are increasing their interest in smart buildings.
Though consumer IoT products have received the most coverage, the introduction of technology at the business level is expected to have a larger effect on the property industry. Nonetheless, the property industry could be best equipped to incorporate the technology by using IoT-enabled building management systems (BMS) to make building more effective and also by using sensor-generated data to improve user experience. Thus, growing smart city investments have created a need for a robust solution that enables property managers and agents to handle accounting, leasing, contract management, and payment activities in an efficient manner. The governments in developed countries are actively promoting digitization and enabling ICT infrastructure solutions to initiate smart city projects; such investments are expected to cater to the growth of this market in the coming years.
Rapidly emerging technologies and changing regulatory environment are redefining how real-estate sector is handled in the global scenario. Since the post-reform period, the real estate market, is the second major contributor to the GDP growth after agriculture, and has witnessed a boom in overseas investments especially in commercial sector. Thus, high investments in smart city projects are considered an important growth factor for the global property management market.
Companies Leveraging the Benefits of SaaS (Software-as-a-Solution) Platform for Property Management
Cloud computing and SaaS (Software-as-a-Solution) platforms are progressively getting mainstream as the favored strategy for service delivery. Subscription-based SaaS solutions enables organizations of all sizes to utilize innovation and improve proficiency. Property organizations are shifting towards adopting SaaS solutions as it allow businesses to manage their operations easily by automating workflows and reducing manual input. Implementation of SaaS solutions enable real-estate companies to reduce complexity and cost compare to on-premises deployment.
Real Estate firms are data-driven, and workers depend on up-to-date details to make critical decisions. With offline networks it impossible to access data from everywhere, establishing a major barrier in the decision-making phase. SaaS solutions, on the other hand, with an internet connection enable users to access information from anywhere with any type of device. Additionally, integration of property software with Customer Relationship Management (CRM) enables agencies and property managers to build and manage relationships with clients and stakeholders.
Also, the SaaS model is influential in enabling multi-vendor device convergence for existing systems. SaaS framework enable property managers to combine their property solutions with advanced payment systems for simple and seamless transactions.
Capital Market Risk and Population Migration will hinder the Market Growth
The supply of property loans and the risk-return requirements associated with it is also a concern for the property managers. Transactions, whether debt or equity, used for the purchase or refinancing and recapitalization of current assets are focused on the liquidity offered by participating in active capital markets.
Real estate companies and property managers understandably pay careful attention to cyclical issues and short-term fluctuations as crucial factors impacting the market such as migration of the people, citing business conditions, changing tax policies, and evolving technology. In addition, urbanization encourages population and economic growth, but it also raises a range of problems that property managers and real estate firms need to tackle in order to reach truly sustainable development.
Asset Opportunities to Reflect Broader Range of Risks (Rising Opportunities will be Accompanied by Greater and more Diverse Risks)
As the property business globalizes, so the scope of risks will get more extensive. At the highest priority on the rundown will be nation or city hazard including political risk and the peril that advantages may just be appropriated. Then again, if nations are socially or politically unstable, there may be a threat of monetary harm to property businesses. For developing markets, a rising investment for real estate may hold an array of dynamic risks. Besides, the scarcity of funds means that real estate agents tend to work with local developers, which entails various operating risks, such as delayed construction sites or even fraudulent activities. This may impede the growth of this market.
Software Segment to Procure Large Market Share
The property management market is segmented into software and services.
It is expected to witness large market share during the forecast period. The property software enables property managers and real estate individuals to carry out property-related operations efficiently and cost-effectively. Previously, property owners and landlords used to hire third-party real estate agents to manage their properties which required high time and extra cost. However, the availability of robust property software has automated and simplified the tasks of property managers and owners.
The services segment is further bifurcated into consulting and support and maintenance. With growing adoption of property software, the demand for related services is expected to boost, reflecting high growth rate during the forecast period.
Cloud-based property management Segment to Aid the Market Growth
The deployment segment is categorized cloud and on-premises.
The on-premises segment is expected to hold the largest share in 2015. The on-premises deployment of property management avoids security concerns over the internet; thus, minimizing the threat of data breaches and cybersecurity attacks. Whereas, cloud-based segment is expected to overcome the on-premises segment in terms of market share during the forecast period.
Cloud-based software helps landlords and property managers to store all documents such as legal contracts, tenancy agreements, and contractor SLA’s (Service Level Agreement) in a single platform with minimal cost. Improved protection is another advantage of cloud property management. For conventional property applications, security upgrades are rare and far between, making the data vulnerable to hacking, power outages, and physical disasters.
Residential Segment to Dominate the Market Owing to Growing Development of Residential Buildings
Based on the application segment, global market has been segmented into commercial and residential.
The residential segment is expected to hold the largest market share. This growth of the segment is mainly owing to the need for property software to manage residential properties such as houses, single and multi-story apartments, and bungalows. With the continuously rising population, the demand for residential buildings is projected to see substantial growth. Thus, to manage this increased number of residential properties, the demand for property software will be elevated.
The commercial segment is expected to witness steady growth over the forecast period. A commercial property manager manages non-residential properties such as offices, retail spaces, industrial buildings, and storage facilities. Commercial property owners maintain detailed administrative and financial reports and maintain up-to-date all relevant repairs, fees, mortgages, and benefits.
The commercial segment is further divided into retail, government, construction and real estate, and others (education, industrial, and hotel). Among these, the adoption of property management in construction and real estate is likely to witness high growth during the forecast period.
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The Market to Witness High Growth Due to Rising Adoption among Property Managers
Based on the end-user segment, global property software has been segmented into property managers, housing associations, real estate agents, and others (third party agents, property investors, etc).
The property managers segment is expected to witness high growth during the forecast period. To certain property managers, the management of their daily duties requires a vast amount of balancing activities around them. Manually performing company activities such as monitoring, rent payments, and handling repair orders are time-consuming and sometimes daunting, thus there has been an increased demand for automated software that enables property managers to manage multiple business operations.
Adoption of this software among third party agents and property investors is expected to grow at a healthy CAGR during the forecast period.
North America Property management Market Size, 2018 (USD Billion)
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The global property management market scope is classified across five regions namely North America, Europe, Asia Pacific, Middle East, and Africa and Latin America
North America market is expected to occupy maximum revenue share in the global market. E-commerce growth in North America is expected to create robust opportunities for real estate players and property managers to invest in property management. External investment in the real estate sector across the region is expected to become more significant in coming years. Real estate wealth managers may use international real estate funds to diversify more efficiently, due high number of investment choices and the scope of economic conditions. Metropolitan areas in the region are leading the battle on population and economic development lines. As a result, urban regions have the most profitable and opportunities-rich real estate markets for property software. The performance of real estate investments in the region strongly correlates with Gross Domestic Product (GDP) growth and demographic trends.
The standpoint for monetary development in the region is more positive for metropolitan zones than the nation in general. Political changes affect segment improvements, for example, relocation. For example, the ongoing US presidential political decision and British vote to leave the European Union may have a segment and a monetary effect at both a nation and city level. Moreover, constantly updating the region's digital strategies and infrastructure has expanded the use of predictive analytics and business intelligence to make buildings future-ready and better utilize IoT in the design and redesign of buildings. This increased transparency has strengthened the investment climate for real estate markets. This has boosted this market growth in North America.
The growth of this market in Asia Pacific is expected to grow at an exponential CAGR during the forecast period. In the developing countries of the Asia-Pacific, the middle-class population is increasing rapidly. In particular, China, India, and Indonesia will increase its relative size in terms of global consumption by the middle class. This creates opportunities for real estate investment, as families can spend more than their essential needs. The logistics, retail and hotel industry is now undergoing a significant transition as it adapts to the rising demands generated by the increasing growth of e-commerce. The insistence on productivity and expense drives logistic companies to make the most of technological advancements and technologies, such as robotics. Similarly, Co-working and shared workspaces have taken off in Asia Pacific in the past few years, adding a tech edge to the stodgy serviced-office market and offering decent returns for landlords.
Changing laws and the importance of greater transparency will have a significant effect on real estate sectors. For example, the revaluation or elimination of government-funded social, senior housing and owner-occupied financial assistance in some countries provides investment opportunities in the private rental and healthcare sectors. Moreover, low housing interest rate proposals by governments in the region have made beneficial addition to the growth of the market.
RealPage, Inc., Appfolio, Inc., and Yardi are Offering Targeted Solutions for Owners and Managers of Various Rental Property Types
RealPage, Inc., is a global company that provides software and data analytics solutions for real estate businesses. The company’s property management solutions benefit owners and property managers to manage buildings such as residential, commercial, and hotels. The SaaS solution developed by the companies provides features such as property management, applicant screening, revenue management, and utility management. These players are specifically focusing on commercial sector of the market to deliver advanced and efficient solutions to the property managers and agents.
September 2019 – RealPage, Inc. acquired U.K-based property solution provider PEX Software Limited. The key objective of this acquisition was to expand its product portfolio and consolidate its position in the market.
September 2018 – RealPage, Inc., a leading provider of property software, launched RealPage Commercial Property Management 5.0 along with additional applications. This single integrated asset management, accounting, and management software help owners and managers to handle commercial office, industrial and retail assets.
The property management market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest property management industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.
An Infographic Representation of Property Management Market
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2015 - 2026
2019 - 2026
2015 - 2017
Value (USD Billion)
Fortune Business Insights says that the market was valued at USD 11.70 billion in 2018.
Fortune Business Insights says that the market is expected to reach USD 23.63 billion by 2026.
Growth of 9.2% CAGR will be observed in the market during the forecast period (2019-2026)
Within the application criterion, the residential segment is expected to lead during the forecast period.
Property managers and owners embracing smart building solutions to attract tenants is expected to primarily drive the market growth.
Yardi Systems, Inc., RealPage, Inc., and AppFolio, Inc. are the top companies in the market.
The construction and real estate segment is expected to grow significantly at the highest CAGR.
The revenue of the market in North America in 2018 was 4.31 USD billion.
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